the role of corporate foresight in exploring new markets

The role of corporate foresight in exploring new markets – evidence

from 3 case studies in the BOP markets

Jakob Højland Department of Management, Aarhus University, Aarhus, Denmark

René Rohrbeck Department of Management, Aarhus University, Aarhus, Denmark

We examine to what extent successful business-development activities in

uncertain environments can be classified as corporate foresight (CF) and to what

extent they have been intentional and systematic. Beginning with identifying

successful cases of new-business development in Bottom of the Pyramid

markets, we use various data sources to reconstruct timelines and map CF

activities. We selected the cases to maximise their heterogeneity in firm size,

industry, nature of the product and ownership structure. Our findings suggest that

the probing (experimental search) phase is particularly important in unknown

and uncertain environments but that perceiving and prospecting (cognitive

search) activities are necessary to find distant opportunities. In addition, we find

that successful business-development activities rely on multiple iterations

between perceiving, prospecting and probing. Our findings emphasize that CF

should include activities that encompass both experimental and cognitive search

elements.

Keywords: Corporate Foresight, Business Development, Cognitive Search,

Experimental Search.

1. Introduction

Over the last decade, technological development such as digitalization and the Internet of

Things (IoT) have created novel opportunity spaces that are now being explored by firms to

develop attractive new markets. Simultaneously, these developments disrupt established

industries in which emerging technologies alter the existing rules of the game and enable

entirely new business models (Johnson, Christensen, and Kagermann 2008). The increased

speed and complexity of today’s business environment calls for novel approaches that permit

the anticipation and interpretation of trends and the use of the insights gained for a

competitive advantage (Tsoukas and Shepherd 2004; Coates, Durance, and Godet 2010). In the past two decades, an increasing number of companies have built corporate foresight (CF)

capabilities (Daheim and Uerz 2008). During this time, CF practices have evolved from

specific deployment of methods and processes to being organizationally integrated and

becoming a key component of the future preparedness of organizations (Rohrbeck, Battistella,

and Huizingh 2015).

CF practices have been shown to be an important predictor for superior profitability and

market valuation growth (Rohrbeck, Kum, and Jissink 2017). Through systematic CF

practices, firms can overcome cognitive and action-level inertia (Gavetti 2012). CF practices

permit the identification of superior courses of action and foreseeing their consequences

(Gavetti and Menon 2016), which can help on the strategy level as well as on the level of

innovating new products, services, and business models (Rohrbeck and Gemünden 2011;

Heger and Rohrbeck 2012). While CF has been shown to create value in saturated Western

markets (Rohrbeck 2012; Rohrbeck and Schwarz 2013), there are no similar studies that

replicate the finding in developing markets.

In this paper, we investigate three cases of successful market exploration in a particularly

challenging segment characterized by a high number of consumers with very low spending

power. Such markets have become known as the Bottom of the Pyramid (BOP) segment

(Prahalad and Hart 2002).

In the following we will first discuss the literature and introduce our analytical framework. In

section 3 we explain our research approach. In section 4 we first analyse our three cases using

timelines and our analytical framework and then report on the cross-case analysis. In section 5

we discuss our findings and discuss future research directions.

2. Building a framework for corporate foresight in BOP markets

2.1. Corporate foresight

CF has been regarded as an organizational ability, set of practices and process (Slaughter

1997; Becker 2002; Rohrbeck 2010a; Hines and Bischop 2006). In this paper, we

conceptualize CF as a set of practices that support new business exploration through

identifying drivers of change (perceiving), interpreting the consequences of the drivers both

individually and collectively (prospecting), and actions that permit the testing of value

propositions, product/service designs and market acceptance (probing).

Perceiving often starts with the acceptance that firms need to build specialized sensors that

reduce blind spots in their peripheral vision (Day and Schoemaker 2004; Winter 2004). The

aim is to identify the majority, if not all, of relevant change drivers in a given market space

and gain a lead-time advantage towards competitors (Rohrbeck 2010b). The outcome of the

perceiving process is a list of weak and strong signals of change, trends, critical events and

strategic surprises (Peter & Jarret, 2015) rated by relevance for the firm. Often, firms will also

organize them on dimensions such as the level of uncertainty, impact, maturity or domains. In

that respect, we define uncertainty as the inability to anticipate the likely evolution of drivers

of change in the business environment, which can be reduced to a certain extent though

structured CF practices (Vecchiato & Roveda, 2010).

Prospecting includes practices that translate signals into insights. Insights are created through

interpreting the signal and the consequences for the focal firm. In new market exploration, a

particular focus is on identifying systemic effects, in which multiple drivers are

interdependent, mutually reinforcing and able to trigger exponential change. This

phenomenon has previously been described as the S-Curve and is today also often called the

tipping point. The tipping point is the moment that a product or service becomes mainstream,

is publicly accepted and sees exponential growth in demand (Gladwell, 2002). Prospecting

involves the usage of structured methods such as scenarios, roadmaps or systems-dynamics

analysis to anticipate potential and plausible development trajectories that can inform the

decision on the course of actions (Gavetti and Menon 2016). Prospecting practices allow the

firm to reduce the effect of uncertainty, i.e., the lack of knowledge about the consequences of

a change. Furthermore, it is the basis for reducing response uncertainty, which is the inability

to identify viable responses in a given situation and understand the consequences of the

choice (Vecchiato and Roveda 2010). Ultimately, the response is shaped by the bounded

rationality of decision makers, as their capability to make rational decisions is limited by past

experiences and current knowledge (Vecchiato 2015).

Probing practices are designed to trigger meaningful organizational responses to change.

Probing is the first phase of direct action. This action can be a direct response to the insights

generated in the perceiving and prospecting phases, or it can be part of an experimental search

scheme in which firms experiment to gain insights (Gavetti and Levinthal 2000). Examples of

probing are initial prototyping, R&D projects, establishments of strategic partnerships and

consumer tests with novel products. The nature of these actions differs across industries.

Increasingly, firms are also using external venturing schemes to experiment outside of the

firms’ boundaries or through internal venturing, in which teams of the firms’ own employees

are supported in building a new solutions, products or businesses (Rohrbeck, Döhler, and

Arnold 2009). Probing is an action-based approach that complements the practices of

perceiving and prospecting.

While the phases are building on each other, they do not necessarily occur in a linear

sequence; rather, they are complementary phases that can form part of an iterative mechanism

that translates signals into insights and action. Firms that regularly iterate between phases will

profit from powerful learning loops (Gavetti and Levinthal 2000).

2.2. Bottom of the Pyramid

The reduction of market protection mechanisms and the consequent openings of economies

around the globe have radically transformed the way business is done today (Prahalad and

Hart 2002). Firms are facing challenges in the form of increased competition and slowing

growth in developed markets, which has forced businesses to be creative and look into the

potential in new and less-developed markets in the global economy (Prahalad and Hart 2002).

Still, few take the leap and realize the potential for the growing consumer segment of the

world’s more than 4 billion people living for $2-4 a day, which is known as the BOP segment

(Dansk Industri 2007).

For our analysis, we define three individual paths for developing BOP business opportunities.

Building a Market through Local Co-Creation and Deep Dialogue emphasizes that in the

BOP segments, markets need to be built together with the consumers. According to Prahalad

& Hart (2002), this often includes the need to provide access to credit and increase the

earning potential of the poor. Another method to increase purchasing power is to introduce

pay-as-you-go business models or single-serve packages to address the buying power issue of

the BOP segment (Prahalad and Hart 2002; Dansk Industri 2007). Simanis and Hart (2008)

suggest a strategy called the BOP protocol, the first step of which is to open the market and

overcome barriers through deep dialogue with local stakeholders to increase the firm’s

credibility and transparency in the new local market.

Creating a Sustainable Value and Distribution Chain emphasizes the creation of a sustainable

business model and achieving scale in all parts of the value chain from production to

distribution to ensure the long-term viability of the business model (Dansk Industri 2007).

When scaling in all parts of the value chain, it is possible for the focal firm to drive down

costs to accommodate the available funds of the BOP consumer (Dansk Industri 2007).

Prahalad and Hart (2002) argue that firms need to invest and promote sustainable

development beginning with the BOP segment. This builds credibility and will later have

great influence on the consumers in Tier 1, i.e., the most financially affluent in society.

Furthermore, it is important to improve access to the BOP, which is geographically dispersed

to be sustainable in distribution networks and communication across geographical areas

(Prahalad and Hart 2002). Therefore, MNCs either need to be creative and establish ties

directly to the end consumer or, more likely, partner with a local champion in the BOP market

to navigate through the complexity of the distribution and value chain.

Create Tailored Product Offerings Profitably emphasizes that firms should be able to adapt

their product offerings to accommodate the tastes and budgets of local consumers. According

to Prahalad and Hart (2002), this product adaptation to local markets and cultures should be

driven through collaboration with local consumers. In that respect, Simanis and Hart (2008)

argue that this is the time for the company to move into the enterprise ‘creation mode’, which

is where the profitable business is created, i.e., not through simply expanding their existing

offerings to new regional markets. This adaptation is also key to achieving scale in the value

and distribution chain, which can be expected as a prerequisite for the firm to achieve

profitability on their products.

Closing the loop on this BOP section and the main topic of CF, we argue that the level and

structure of CF activities in firms create the foundation for the BOP business-development

phase, as illustrated in our conceptual framework in Figure 1.

Figure 1: Conceptual model

We employ this conceptual model as a research lens through which we observe and discuss

the actual business-development sequence.

3. Research approach

In our research, we investigate the question to which role deliberate & structured vs.

unstructured CF play in the exploration of new markets in uncertain environments. We use

CF practices and the BOP-paths frameworks as guides for deductive reasoning but enter the

field with open interview guides and openness towards uncovering alternative explanations

(Saunders, Lewis, and Thornhill 2007).

3.1. Research setting and case selection

In our study we have applied a maximum-variation criteria to identify cases which were

different on size, industry and ownership structure, see Table 1 (Eisenhardt 1989). The

maximum variation also boosts the generalizability of our findings beyond the context of a

single firm (Eriksson and Kovalainen 2008; Flyvbjerg 2006; Yin 2003).

Table 1: Overview cases

Evershelter Kamstrup Arla

Industry Aid & relief Engineering Food & beverage

Industry

characteristics

Heavily influenced by

regulation

Reliance on high-tech

components

High interdependencies

between product and

production process

Nature of

product

New to the world New to Africa New to Africa

Market pull Technology push Market pull

Built for BOP market Adapted to BOP market Adapted to BOP market

Size Small, start-up Mid-sized, 1,000

employees

Large, 18,000 employees

BOP BUSINESS DEVELOPMENT PATHSCORPORATE FORESIGHT

Building a Market Through Local Co-Creation and Deep

Dialogue

Creating a Sustainable Value and Distribution Chain

Create Tailored Product Offerings Profitably

Prospecting

Perceiving

Probing

Evershelter Kamstrup Arla

Ownership

structure

Privately owned Owned by large energy

company

Cooperative

In addition, we tested that the cases meet three criteria: (a) benefitting the BOP segment, (b)

operating in Africa, and (c) the accessibility of key employees involved in the process of

developing the business.

3.2. Data collection, reduction and coding

For our data collection, we built on secondary data from reports and internal documents in

addition to face-to-face and phone interviews (Rubin and Rubin 2005). For the interview, we

relied on semi-structured questionnaires and the draft timelines that we had prepared on the basis of the secondary data. In total, eight interviews were conducted: two from each case

company, which included always the main responsible for the business development activity

and one team member. In addition, we interviewed for triangulation one international expert

on the BOP segment and one Danish business-in-Africa experts.

The processing of the data followed in the first step deductive principles using the key

constructs of CF and the BOP paths as a form of thematic coding (Eriksson and Kovalainen

2008). In the second round of coding, we manually reviewed all transcripts to identify

additional areas of interest. This coding was driven by more openness towards new patterns

and emergent findings using inductive reasoning (Eisenhardt 1989). We applied this two-

phase data-reduction and coding process first to the within-case level and then to our cross-

case analysis.

4. Results

In the results section, we will first present our within-case findings for all three cases. In

section 4.4 we then discuss the extent to which the practices have contributed to the success

of the business-development activity. Special attention is placed on market entry and

business-model adaptation. Where we conceptualize ‘business model’, as the architectural

setup a firm uses to define a compelling value proposition and create and capture value

(Johnson, Christensen, and Kagermann 2008).

4.1. Start-up company in housing industry (EverShelter)

Our first case, Evershelter, is a start-up that produces shelter solutions for displaced people.

The firm operates in the aid-and-relief industry, serving the BOP segment by providing an

alternative to other temporary housing solutions, which are primarily tents.

Figure 2 shows the sequence of the actual business-development activities. It can be seen that

the early perceiving (step 1) was the result of an unsystematic activity. The initial idea was

triggered by a long-term housing project for refugees for which the father of the CEO of Evershelter (JC) was responsible. JC explained that he initially became interested when he

saw reports about refugees. He then realized that technology today can enable alternative

solutions to tents that would be ‘more robust and which could hold longer […]’. This was

particularly relevant, as refugees stayed increasingly longer in camps (at that time an average

of 15 years) that were designed to be short-term shelters and not long-term housing. At that

stage, JC was still acting alone and started to perform his own prospecting (step 2), beginning

with technology scanning and looking on the Internet for alternatives to tents and mapping

possible technical solutions. On that quest, he uncovered a potential technology provider in

Denmark and moved on to investigate the market. To further explore the viability of the

business opportunity, JC reviewed refugee statistics from the UN, finding that the number of

people living in refugee camps was starting to grow dramatically, increasing his hope of

doing good and simultaneously providing a viable business opportunity. For probing (step 3),

JC used the opportunity that he was enrolled in a master’s course on disaster relieve, in which

the other participants were all ‘experienced camp people, who had flown in from around the

world […] and I just got a lot of great feedback’.

Figure 2: Business development sequence - Evershelter

With encouraging feedback on the first prototype, JC was able to find a first innovation

incubator that provided 60% of the investment for building the first prototype. At the same

time, he found with Real Relief a complementary business partner that was headed by a well-

respected and innovative business woman from the aid-and-relief industry, according to one

of the interviewed experts on Africa. This partnership brought significantly more insight into

the shelter business and consequently helped create through prospecting (step 4) a deeper

understanding of the future business model and the elements that would be crucial for a

solution and commercial success. Among these, it was discovered that the tents lacked

privacy and security, which are particularly important for long-term residents. With this

reinforced understanding, the second round of probing (step 5) was prepared with the

development of a more stable prototype. With this prototype, they engaged in field tests,

which included one unit in Iraq that subsequently was expanded to 33 and 14 in Uganda. This

probing was made possible through the ‘Dansk Flygtningehjælp’. This second probing phase

also led to two major product improvements: making the doors lockable and allowing them to

let more light through. Finally, in the third probing phase (step 6), further improvements were

investigated, including designs to make the shelter earthquake proof. This probing was

effectuated by involving the Universities of Aarhus and Copenhagen, which also allowed the

limiting of costs and ensured the use of state-of-the-art technology.

With regards to the BOP business-development activities, we attest that Evershelter has

mostly used two of the three paths.

• They embraced the creating a sustainable value and distribution chain through engaging

in the partnership with Real Relief and with the Danske Flygtningehjælp to build a value

chain reaching all the way to the end customer.

• They also worked on creating tailored product offerings profitably by starting their

development with the end customer with the BOP needs (security and privacy) in mind.

When looking at how intentional and systematic the practices were, we can find a typical

start-up pattern in which the initial value proposition idea is not derived from a systematic

approach but from a person-specific insight that was picked up unintentionally. In the later

BO

P B

DC

OR

PO

RA

TE

FO

RE

SIG

HT

PERCEIVING

PROSPECTING

PROBING

Increase of average stay duration in

refugee camps

Technology enables superior solution with only

minor cost increase

Build prototype and customer

interaction

TIME

New prototype and customer

interaction

Building a Market Through Local

Co-Creation and Deep Dialogue- not employed -

Creating a Sustainable Value and

Distribution Chain- employed -

Create Tailored Product Offerings

Profitably- employed -

Co-financed field test

PROSPECTING

Privacy and security are

unfulfilled needs

1

2

3

4

5 6

outcome outcome outcomeIntentional and systematic intentional unintentional

stages, one could have expected that the more the company needs to rely on partnerships and

external funding, the more it would need to engage in more structured prospecting activities.

Here, however, the approach was still heavily instinct driven, which the head of Real Relief

commented on as a potential reason for missing valuable opportunities. However, the last two

phases were both intentional and systematic.

4.2. Multinational corporation in the engineering industry (Kamstrup)

Our second case, Kamstrup, is a world-leading company within the industry of intelligent

metering solutions, operating in 24 countries worldwide as a direct supplier for energy and

utility companies. Since 2009, Kamstrup has served the African market, including the BOP

segment.

In the case of Kamstrup, we would expect that, as an established firm owned by an even

larger mother company, it would have a more structured approach to new business

development than our first start-up case. Indeed, the perceiving activities are following an

intentional and systematic practice that is the business-development team drives. The practice

consists of using external networks and reports from think tanks and media-monitoring data.

Of the perceiving function, key elements are outsourced to external consultants and futurists.

Figure 3 gives an overview of the business-development activities. As a result of the initial

perceiving activity (step 1) several mega trends were identified, one of which was the lack of

access to electricity in developing countries. In many countries, this trend had already

triggered meaningful governmental and NGO activities. In some parts of Africa, the share of

consumers with access to electricity is as low as 30%. Consequently, many African utility

companies are actively seeking smart energy management solutions, which triggered probing

activities (step 2) in Kamstrup. These probing activities consist of product adaptations to the

local needs. Whereas these probing activities ensured that the solution-market fit was

enhanced, it was not sufficient to enter into large-scale contracts, and the business-

development activities in Africa moved back to the prospecting phase (step 3). The

prospecting effort was aimed at predicting and managing the tipping point, which would pave

the way for large-scale adoption of smart energy solutions.

Figure 3: Business development sequence – Kamstrup

Through working with the local customers, Kamstrup could substantiate that a tipping point is

approaching. Consequently, they moved to the next probing phase (step 4) towards acquiring

the necessary certificates for a number of African countries. With the certificates in hand,

BO

P B

DC

OR

PO

RA

TE

FO

RE

SIG

HT

PERCEIVING

PROSPECTING

PROBING

Lack of access to electricity triggers strong demand for

smart solutions

Adapting existing products to local

needs

Managing the tipping point for

smart metering in

Africa

TIME

Proof-of-Concept with local customers




Distribution Chain- not employed -



Acquiring needed certificates to sell

in Africa


1

2

3

4 5

they could reengage with the customer, with whom they had already, during the prospecting

phase, built a deep relationship, and move towards the proof-of-concept (PoC) phase (step 3).

Such PoCs include a 200-device pilot project in Kenya. To invest in large-scale deployments,

these probing activities are essential; as the head of sales explains: ‘Here you get to see reality

and know the customer, the environment of the metering device, and pressure test your

product to make sure that it can perform, so you will also increase customer confidence that

the product will solve his business issue.’

From the BOP business-development paths,

• The creation of tailored solutions through the PoC phase was particularly pronounced.

The product needed to be adapted to African needs, and Kamstrup worked towards that

goal directly with the local utilities. This work was needed, as the customers in Africa

were faced with very different challenges and thus needed different value propositions,

e.g., increased access to energy in Africa vs. increased energy efficiency in Europe.

4.3. Multinational corporation in food & beverages industry (Arla)

Our last case, Arla, is a global dairy company. Their products are fast-moving consumer

goods, for which prices are low but volumes are high. Arla operates in markets that need high

degrees of product adaptations to the specific needs and tastes of the local consumer groups.

Figure 4 shows the business-development sequence that led to this market success.

The perception phase (step 1) of this success story begins with a lack of perception of a

strategic surprise, i.e., the weak signals have remained undetected, and the strategic surprise

was only spotted in the fait-accompli state. This strategic surprise was the removal of

subsidies that were the basis for the profitable business case of shipping European milk to

Africa. The logical consequence would have been to pull out of the market as quickly as

possible. Through intentional, but at the start, mostly unstructured perceiving (step 2) Arla

identified two key trends: the growing middle class and the removal of trade barriers, which

could eventually lead towards a very attractive future market. However, it was also clear that

in the short-term, a solution needed to be found to drastically reduce production costs. This

solution was found through prospecting (step 3). As a first insight, it became clear that a new

solution would need to meet three criteria to be considered a viable BOP product: (i) it needs

to have a ‘long life’ because otherwise it could not be produced on the basis of European milk

and shipped to Africa, (ii) it needs to be ‘ambient’, i.e., it has to be possible to store and

distribute without cooling and (iii) it needs to be ‘affordable’. The solution was milk powder,

which had the same nutritional qualities as whole milk powder but in which the milk fat was

substituted by vegetable fat, which drastically lowered the production cost.

The first probing phase (step 4) was thus mainly concerned with developing the right formula

for the milk and developing the production process. The second phase of probing (step 5) was

prototyping the production to start going through the official approval tests to gain market

access. After gaining the necessary certificates, the market development went smoothly, and

Arla became a market leader in a number of regions in Nigeria. However, unexpected

competitor lawsuits resulted in an injunction that prevented Arla from selling its product.

Through an additional prospecting effort (step 6), it was possible to adapt the design and

circumvent the injunction.

Figure 4: Business development sequence - Arla

Another interesting aspect in the case was the comprehensive application of the BOP

business-development paths.

• Arla has been successful in building the market through local co-creation, in particular

through multiple rounds of consumer tests in Africa. Here, Arla investigated and

cocreated product characteristics, such as taste, size and price point.

• Arla had earlier understood the need to tailor its offerings, leading to the low-cost, fat-

filled formula. In addition, effort also went into adapting the milk’s taste to local

preferences.

• More importantly, they understood that large-quantity packaging could be an to buy the

product. This insight led to the development of 6-g single-serving packages that worked

well for consumers in BOP markets. However, another challenge was that this packaging

and the associated distribution system would become too expensive if the packaging

needed to occur in Europe. A solution was to build a local packaging site that formed the

basis for a local value and distribution chain. This solution allowed positioning the

product in the low-cost market and, as an additional benefit, led to local job creation,

which was seen as a highly valued local engagement that in turn boosted the credibility of

Arla as a firm and the brand attachment.

4.4. Cross-Case Analysis

In the cross-case analysis we first looked for patters by systematically going through the firm

characteristics. When looking for effects from industry on CF practices, theory would expect

to find more intentional and systematic practices in industries prone to disruptions (Müller

and Müller-Stewens 2008; Sarpong and O'Regan 2014). In our case, Kamstrup, from an

industry with a high level of disruption, has indeed been more active than Arla, which

operates in a comparably low-disruptive environment. Evershelter operates in an industry that

is highly regulated and dependent on political influences. The initial idea and a great amount

of the prospecting has consequently been focused on the political level, relying, for example,

on UN reports. The higher deployment of systematic foresight techniques can, in the case of

Kamstrup, also have resulted from the need for heavy investments in technology development

and systems integration, which translates into pressure to seek economies of scale by

expanding globally.

When looking for effects from the nature of the product, we would expect that technology-

push products would be complemented by market perceiving and prospecting activities

(Hofmann 2015), which was also the case for Kamstrup. For market-pull products, dedicated

BO

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DC

OR

PO

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FO

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SIG

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PERCEIVING

PROSPECTING

PROBING

Removal of subsidies for imported Milk

Growing middle class in markets

that are becoming

more open

TIME

Official testing for market approval

Building of a new strategy to circumvent an

injunction

PROSPECTING

Create the right value formula for the fat filled milk

1 2

4 5

6


Identification of the ”fat-milk”

solution

3




Distribution Chain- employed -



scouting for technology would be expected. In Evershelter, that also occurred, while in the

case of Arla, it was more a matter of using internal technological capabilities to build the new

BOP product. We also found that the products that existed and were then adapted to Africa

relied more on probing (experimental search) and less on prospecting (cognitive search).

However, this might also reduce their impact, as their positioning might be closer to the

current products than what cognitive search might have revealed.

The expected effects of size would be that the larger a firm is, the more likely it would be to

have established formal CF capabilities (Schwarz 2008; Daheim and Uerz 2008). Large firms

need to protect assets and ensure that the firm can renew its competitive advantage (Ruff

2015; Boe-Lillegraven and Monterde 2015; Hines and Gold 2015; Rohrbeck, Arnold, and

Heuer 2007). In that respect, it comes as a surprise that the monitoring of the political

situation, which led to the removal of subsidies, was not perceived early in the Arla case.

However, the following prospecting and probing mechanisms were still potent enough to save

the market and allow Arla to attain a market-leader position with its new product. On the

other end of the size scale, Evershelter conducted its foresight activities in a more ad-hoc and on-demand fashion.

The ownership structure is a relatively unexplored influencing factor. However, we enter the

field with the expectation that privately or cooperatively owned companies are more likely to

take a long-term investment perspective than shareholder-owned firms, and consequently, that

they would be more interested in investing in CF (van der Duin and Hartigh 2009). In our

case, we attest that the influence of ownership structure is weak and overridden by other

factors. In particular, in the comparison of Arla and Kamstrup, we see that the nature of the

product has mostly led to Arla being less invested in structured foresight approaches than

Kamstrup.

In addition to the influence of firm characteristics, we wanted to search for patterns in the

business-development sequence. Here the first notable commonality was that all firms

underwent iterations within the 3 Ps (perceiving, prospecting, and probing) of CF. The

implication is that firms need to stay persistent when exploring new markets with foresight

and be ready to iterate between thinking (perceiving, prospecting) and acting (probing).

Explained differently, they can profit from feedback loops between cognitive and

experimental search activities.

To differentiate the extent to which the actual business-development activities match with the

prescriptions of CF practices, we introduced the following levels: a) unintentional (no formal

CF activities and no planned, deliberate effort), intentional (still no formal CF practices but

planned and deliberate) and intentional and systematic (purposefully exercised CF practice).

We find that CF practices were only in one out of three cases the trigger for the business-

development activity. In all cases, we find intended and systematic CF activities somewhere

in the business-development sequence (typically in the second half of the sequence). This

finding suggests firms’ weakness to repeatedly and systematically trigger new business-

development. It also shows that once triggered, the firms can rely more on established and

effective CF methods and tools. This finding resonates well with the suggestion of the

innovation’s fuzzy-front-end literature that the main differentiator between average and

outperforming firms might be in the degree of mastery of the early and initial phases

(Rohrbeck 2013; Price et al. 2009).

In addition, we find that when complexity and uncertainty is high, firms tend to engage in

early and extensive probing (experimental search) activities. This is insofar justified that CF

requires a certain level of predetermination, i.e., justified expectations about the direction and

rate of change (Van der Heijden 2005). However, it carries the risk that the identified

opportunities are not sufficiently distant to the current market to carry superior value creation

potential. As Gavetti and Levinthal (2000) emphasize, cognitive search (perceiving and

prospecting) is more potent than experimental search to uncover distant alternatives.

5. Discussion

The aim of our study was to investigate the extent to which actual and successful business-

development activities can be classified as CF and the extent to which they have been

intentional and systematic. We placed our empirical investigation in BOP markets

deliberately for two reasons. First, we see these markets as being particularly relevant for

creating value for firms and societies alike. Second, we use them as an environment with a

high level of uncertainty and as markets where firms have very limited past experience.

To boost generalizability, we selected cases that were very different from each other, which

limited our ability to use replication for the validation of our findings. Our findings are thus

more indicative than conclusive. The phenomena we found and discussed should be thus

subject to further analysis.

Our research approach is heavily reliant on timelines, which we constructed through

secondary data (internal and external reports and documents), actor interviews (with two

respondents per case) and interviews with external observers and Africa experts. This allowed

us to ensure a moderate level of triangulation, which reduced a potential single-source bias.

However, the retrospect bias could have negatively influenced our data. Future studies could

overcome these limitations by using more data-collection techniques, such as observations,

diaries and more detailed documents, such as minutes of key meetings, project presentations

and email-based discussions.

6. Conclusion

With this article, we want to contribute to our understanding of the impact of CF activities.

While research on CF has typically taken its starting point in observing intended and

systematic approaches (Ruff 2006; Peter and Jarratt 2015), we started from the other

direction. This provides us with an interesting vantage point from which we can

systematically challenge the wisdom that CF activities contribute to the exploration success of

a firm.

We find that in our sample, firms were using systematic CF methods only rarely in the early

phases, suggesting that there is a high risk that opportunities remain unidentified and

consequently unexplored and unexploited. In the latter phases, however, more systematic

activities are conducted that include scanning for and matching of technology and market

changes and systematically constructing value formulas and business models.

We further found that the successful cases went through multiple iterations of perceiving,

prospecting and probing, suggesting that successful business development is a non-linear process that builds on feedback loops and requires persistence. For theory our finding

suggests that cognitive and experimental search mechanisms must be combined to create

effective exploration capabilities (Gavetti and Levinthal 2000). This could permit overcoming

the weaknesses of the one search mode, e.g., the inability to identify distant opportunities

with experimental search, with the strengths of the other search mode, e.g., the ability to use

cognitive search to overcome the experience bound.

The setting in the BOP markets placed us empirically in a high uncertainty environment,

which forms a stark contrast towards business development in developed countries and

markets, in which, for most, driving factors have a high level of predetermination and data

availability is high. In this context, we can attest that firms relied heavily on early and

extensive probing activities. These experimental search activities seemed to have a dual role.

First, they provided tangible POCs, which aid in decision making. Second, they allowed the

generation of insights into market and technology aspects that would ex-ante not have been

judged to be relevant.

In conclusion, we expect that also outside our investigation scope, the BOP markets, the

importance of probing activities has been underestimated. While traditional CF literature

prescribes many methods, tools and practices for cognitive search (perceiving and

prospecting), we conclude that in future investigations, we need to pay more attention to the

need for and benefits of experimental search (probing).

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